Canada is busy celebrating its Olympic women’s soccer team, but not all clubs are having the same success.
Shortly before the debut of its IPO on the NYSE, Man United slashed its share price, expected to range from $16 to $20, to only $14, reports the Guardian.
The 16.7 million shares are being sold by the Glazer family, who bought United in 2005 for about £800m. They own a 10% share and will raise about $330 million, which is on track with the $300 million target originally publicized by the team.
Even after the cut, the club is still valued at $2.3 billion, making it the most valuable team in the world. Forbes says Real Madrid is its closest rival.
Facebook’s failure continues to cast a shadow, though, with Wall Street analysts saying the sale could be a disappointment. “I’m calling this ‘Son of Facebook,’ ” David Menlow, president of the research firm IPOfinancial.com, told the Guardian.
Additionally, some are warning against jumping on the bandwagon; Forbes says, “Publicly traded professional sports teams rarely outperform the market, and they don’t even pay a dividend, or grant shareholders any level of control over company decisions.”
And they may be right. A recent report by Globe and Mail says trading remained flat during morning trading. Shares rose only 5 cents before falling back. If trading doesn’t improve, the club’s plans to pay off its heavy debt burden and seek new players will have to be postponed. United had debt of £423 million ($661 million) at the end of March.